Cannabis Sales On The Oregon-Idaho Border Are 420% Higher Than Average

Written by Harmeet Kaur | 21 Jan 2020
📷 The Motley Fool

Sometimes truth really is stranger than fiction. Cannabis sales in Oregon along the state's border with Idaho are booming, according to the Oregon Office of Economic Analysis (OEA). That's to be expected, given that recreational marijuana isn't legal in Idaho, but the numbers are still surprising - in more ways than one.

"In things you cannot make up, Oregon sales per adult along the Idaho border are 420% the statewide average," Josh Lehner, an economist with the OEA, wrote in a post on Friday.

Yes, the very same number that happens to be code for cannabis consumption. Cue the giggling. Oregon's uptick in marijuana sales along the Idaho border doesn't necessarily mean that it's all Idahoans who are lighting up, Lehner said. The boost in sales could also be coming from other customers who are traveling from even further away or from other Oregonians passing through the area, he said.

Washington is also seeing higher-than-average marijuana sales along its border with Idaho, Lehner said in the post. He attributed this pattern to a border effect, or a phenomenon observed when neighbouring jurisdictions have different rules, regulations or tax rates for one industry or product.

Recreational marijuana is legal in both Oregon and Washington, while the substance remains illegal in Idaho for all purposes. About 75% of marijuana sales in Oregon and 35% of sales in Washington in counties along the borders with Idaho appear to be due to the border effect, Lehner said, citing data from the Oregon Liquor Control Commission and the Washington State Liquor and Cannabis Board.

"Obviously recreational cannabis is not legal in Idaho, but even after throwing the data into a rough border tax model that accounts for incomes, number of retailers, tax rates and the like, there remains a huge border effect," he wrote.

Even though cannabis is legal in both Oregon and Washington, the counties on the border between the states are seeing a border effect of their own. Overall, sales are 16% higher per capita on the Oregon side of the border, according to the OEA analysis. This is likely because Washington has fewer retailers and Oregon has lower taxes, Lehner said.

"This speaks to product availability and the final price to consumers being key driving factors in consumer spending patterns, which create much of the border effect," he wrote. While the 420% statistic is a fun coincidence, don't expect it to last long. Recreational cannabis sales are expected to increase significantly in the decade ahead, according to the OEA analysis.

"Our office's forecast calls for sales to grow approximately 80% over this time period as incomes grow, the state's population increases, and marijuana becomes more socially acceptable and usage rates rise," Lehner wrote.

Source: CNN Business